Relationships on the Rocks: Contract Evolution in a Market for Ice

By Tarek Ghani and Tristan Reed

American Economic Journal: Microeconomics, February 2022

Firms use relational contracts to support repeated trade. Do these informal agreements evolve in response to market conditions? In a market for ice, firms reestablish relationships on new terms when a prior agreement breaks down. Using transaction data, w...

Regulating Product Communication

By Maarten C. W. Janssen and Santanu Roy

American Economic Journal: Microeconomics, February 2022

Information regulation that penalizes deceptive communication by firms can have significant unintended consequences. We consider a market where competing firms communicate private information about product quality through a combination of pricing and dire...

Learning in Relational Contracts

By Rumen Kostadinov and Aditya Kuvalekar

American Economic Journal: Microeconomics, February 2022

We study relational contracts between a firm and a worker with mutual uncertainty about match quality. The worker's actions are publicly observed and generate both output and information about the match quality. We show that the relational contracts may b...

Showing Off or Laying Low? The Economics of Psych-outs

By Philipp Denter, John Morgan, and Dana Sisak

American Economic Journal: Microeconomics, February 2022

We analyze the incentives for showing off, which we model as a costly signaling game, and study the consequences of norms against such behavior. Prior to competing in a contest, a newcomer can signal his talent to an incumbent. In equilibrium, costly sign...

How Bayesian Persuasion Can Help Reduce Illegal Parking and Other Socially Undesirable Behavior

By Penélope Hernández and Zvika Neeman

American Economic Journal: Microeconomics, February 2022

We consider the question of how best to allocate enforcement resources across different locations with the goal of deterring unwanted behavior. We rely on "Bayesian persuasion" to improve deterrence. We focus on the case where agents care only about the e...

Immigration politics

[Research Highlight]

January 28, 2022

Anna Maria Mayda discusses how the skill level of foreign workers influences native voters in the United States.

The Political Impact of Immigration: Evidence from the United States

By Anna Maria Mayda, Giovanni Peri, and Walter Steingress

American Economic Journal: Applied Economics, January 2022

This paper studies the impact of immigration to the United States on the vote share for the Republican Party using county-level data from 1990 to 2016. Our main contribution is to show that an increase in high-skilled immigrants decreases the share of Rep...

Front Matter

American Economic Journal: Economic Policy, February 2022

The Effects of Mortgage Credit Availability: Evidence from Minimum Credit Score Lending Rules

By Steven Laufer and Andrew Paciorek

American Economic Journal: Economic Policy, February 2022

This paper uses changes in mortgage lenders' minimum credit score thresholds to credibly identify the effects of access to household credit. Falling under these thresholds has very large negative effects on borrowing for up to two years, and these effects...

Adaptation to Environmental Change: Agriculture and the Unexpected Incidence of the Acid Rain Program

By Nicholas J. Sanders and Alan I. Barreca

American Economic Journal: Economic Policy, February 2022

The Acid Rain Program (ARP) cut sulfur dioxide (SO2) emissions from power plants in the United States, with considerable benefits. We show this also reduced ambient sulfate levels, which lowered agriculture productivity through decreased soil s...

The Impact of the Affordable Care Act: Evidence from California's Hospital Sector

By Mark Duggan, Atul Gupta, and Emilie Jackson

American Economic Journal: Economic Policy, February 2022

We exploit changes in the discontinuity in health insurance coverage at age 65 induced by the implementation of the Affordable Care Act to examine effects on coverage, hospital use, and patient health. We then link these changes to effects on hospital fin...

Dominated Options in Health Insurance Plans

By Chenyuan Liu and Justin Sydnor

American Economic Journal: Economic Policy, February 2022

Prior research documents that there are sometimes dominated options in health plan menus, but is that common? We analyze Kaiser Family Foundation data on health plans that firms offer to their employees. For firms offering both a high-deductible and lower...

The Rising Value of Time and the Origin of Urban Gentrification

By Yichen Su

American Economic Journal: Economic Policy, February 2022

In recent decades, gentrification has transformed American central city neighborhoods. I estimate a spatial equilibrium model to show that the rising value of high-skilled workers' time contributes to the gentrification of American central cities. I show ...

Reducing Frictions in College Admissions: Evidence from the Common Application

By Brian Knight and Nathan Schiff

American Economic Journal: Economic Policy, February 2022

College admissions in the United States are decentralized, creating frictions that limit student choice. We study the Common Application (CA) platform, under which students submit a single application to member schools, potentially reducing frictions and ...

Issuance and Incidence: SNAP Benefit Cycles and Grocery Prices

By Jacob Goldin, Tatiana Homonoff, and Katherine Meckel

American Economic Journal: Economic Policy, February 2022

Many safety net programs issue benefits as monthly lump-sum payments. We investigate how the timing of Supplemental Nutrition Assistance Program (SNAP) benefit issuance affects food purchases and the incidence of the transfer. Using scanner data from a la...

Increasing Hours Worked: Moonlighting Responses to a Large Tax Reform

By Alisa Tazhitdinova

American Economic Journal: Economic Policy, February 2022

Moonlighting is increasingly popular in OECD countries, with 5 to 10 percent of workers holding two or more jobs. However, little is known about the responsiveness of moonlighting to financial incentives due to the lack of identifying variation. This pape...

Yellow Vests, Pessimistic Beliefs, and Carbon Tax Aversion

By Thomas Douenne and Adrien Fabre

American Economic Journal: Economic Policy, February 2022

Using a representative survey, we find that after the Yellow Vests movement, French people would largely reject a tax and dividend policy, i.e., a carbon tax whose revenues are redistributed uniformly to each adult. They overestimate their net monetary lo...

Removing Welfare Traps: Employment Responses in the Finnish Basic Income Experiment

By Jouko Verho, Kari Hämäläinen, and Ohto Kanninen

American Economic Journal: Economic Policy, February 2022

This paper provides evidence that replacing minimum unemployment benefits with a basic income of equal size has minor employment effects at best. We examine an experiment in Finland in which 2,000 benefit recipients were randomized to receive a monthly ba...

Improving Preferential Market Access through Rules of Origin: Firm-Level Evidence from Bangladesh

By Tobias Sytsma

American Economic Journal: Economic Policy, February 2022

In countries where there exist limited opportunities to source inputs locally, rules of origin undermine access to preferential trade agreements for final goods exporters. I analyze the 2011 revision to the rules of origin associated with the European Uni...

How Do Households Value the Future? Evidence from Property Taxes

By Hans R.A. Koster and Edward W. Pinchbeck

American Economic Journal: Economic Policy, February 2022

Despite the near ubiquity of intertemporal choice, there is little consensus on the rate at which individuals trade present and future costs and benefits. We contribute to this debate by estimating discount rates from extensive data on housing transaction...